In bid to address Africa's high debt burden, SA proposes Cost of Capital Commission
More than 20 low-income African countries are either already in debt distress or at high risk of debt distress.
Debt Money
JOHANNESBURG - South Africa has tabled a proposal to establish a Cost of Capital Commission during its G20 presidency to address Africa’s high debt burden.
On Monday, the country hosted the first G20 meeting in Sandton, with talks between diplomats from member states expected to enter day two on Tuesday.
South Africa says it will put challenges faced by Africa high on the agenda, including the high debt servicing costs.
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More than 20 low-income African countries are either already in debt distress or at high risk of debt distress.
External debt has climbed to more than $650 billion, and debt servicing costs reached nearly $90 billion in 2024.
According to a report by the United Nations, at least 40% of African countries spend more on repaying their debts than on health care.
This means a considerable number of countries on the continent are not meeting their domestic targets for development.
The Department of International Relations and Cooperation Minister, Ronald Lamola, said the Cost of Capital Commission is expected to level the playing field.
“So that commission will help us in terms of outlining the cost to capital for the rest of the world and to argue a case that Africa can’t be paying so much for the same amount that the other developing countries that are being helped by the multilateral institutions. It will be revolutionary.”
Lamola said the commission would address the United Nations' calls for an urgent need to reform Africa’s debt structures, reclaim fiscal space and refocus resources on a sustainable development agenda.